Comparing Super Fund Returns

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For those who do not wish to visit a financial planner or those who simply want a quick response without having to go through lots of discussion, here is a very good website that offers fund comparisons. It is the Chant West “Applecheck” site.

It focusses on more than just returns, and is an extremely good starting point for anyone considering different superannuation fund options. The cost as of today is around $55 Рwhich seems to be quite good value.

Please note the usual disclaimers and the like – i am simply providing a link to the site. Whether the material is useful, helpful or whatever is up to you.

Some industry superannuation funds offer their members access to this site for free – an excellent service and an example of the benefits that can be provided by large organisations.

The key to looking at super funds is usually anything but their investment performance. That sounds counter-intuitive but it really isn’t. Performance is important but looking back doesn’t necessarily assist you to look forward. Once upon a time, it was my role to regularly look at superannuation fund returns. As an exercise, i kept a running book on how an investor would fare if they were to choose the best performing 1 year return manager from last year and invest with them for a year, changing again a year later. The alternative was to invest with the worst manager. For most of the time that i operated that system, there was no clear distinction between the two. Again, it sounds strange but it is quite logical. Different managers of money have strengths and weaknesses that suit (or don’t) various market cycles. In addition, the flow of new funds versus losing accounts can have a material impact on fund returns.

It is often more helpful to look at where the money is invested, as that will help you to gain some understanding of the return potential of your money. In other words, if more of your money is in the sharemarket then you can expect certain things – more volatility in value but potentially a higher return. The particular manager may be better or worse than other investors into the sharemarket but that is something that you will find difficult to assess (even experts have difficulty with that job – which is why fund manager mandates in super funds are quite fluid).

For the same market exposure, there will be times when different funds obtain better or worse than average returns, and for all sorts of reasons. So it is generally better to spend time gaining an understanding of the type of exposure the fund is offering you, rather than looking at performance figures.

As always, tread warily when looking at comparisons of superannuation funds. And beware of ideology – whether a fund is retail, wholesale, employer or Industry Fund based does little to clarify exactly where your money will be invested and what options are available to you to deal with it.

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